The present invention relates to transactions for payments of goods/services and, more particularly, to a phone-based electronic wallet providing authentication of transactions across multiple channels of commerce.
Both credit cards and debit cards are commonly used in the retail environment for the purchase of goods and/or services. Such cards are popular with consumers, and merchants accept these cards as a necessary part of doing business, i.e., they provide an effective substitute to cash and checks.
These card-based transactions are typically performed across multiple channels of commerce. For example, card-based transactions may be performed in person at a retail outlet, via a computer connected to the internet, via a mobile phone and/or via a company-based call center (e.g., a 1-800 number for a catalog company). These various transactions are conducted in different ways and, accordingly, have different levels of fraud risk associated therewith. In addition, the mentioned transactions generally require that the consumer have his or her card in hand to either present to the cashier in a retail environment, or to enter the requested information via the internet and/or over the telephone. Those knowledgeable in the field with recognize that the risk of financial fraud is greater during remote transactions because there is less ability for the merchant to verify the identity and authenticity of the cardholder.
It will also be appreciated that in today's environment it is common for a consumer to carry his or her cell/mobile phone on their person at all times. In fact, on many occasions it is more likely that the consumer will be carrying his/her phone, than carrying his/her wallet. Companies have attempted to tap into this trend by offering/facilitating various phone-based applications directed to a whole range of services. The recent growth of so-called “smart phones” has greatly increased the interest of companies in this area. As a result, more and more transactions are likely to be performed from a remote location, e.g., ordering a product over the internet while standing in line. However, as the number of remote transactions increase, so does the risk of financial fraud.
There is therefore a need in the art for a method and system for authenticating electronic transactions across multiple channels of commerce. There is a further need in the art for a method and system which operates in conjunction with a phone (e.g., a smart phone) for authenticating financial transactions whether initiated in person, over the internet via a stand alone terminal, via the placement of a call to the call center of a company, and/or via a transaction initiated with the very same phone. Finally, there is a need in the art for a method and system which allows a bank or other financial institution to reduce fees to merchants conducting remote electronic transactions when utilizing enhanced authentication techniques, and to limit/reverse the shifting of fraud liability to the merchant for such remote transactions.